1989 (3) TMI 134 - HC - Customs

Crane - Interpretation of statute - Taxing statute - Appeal - Condonation of delay - Refund - Duty paid under mistake of law

Summary

Issues Involved:
1. Classification of the imported consignment under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975.
2. Entitlement to a refund of the difference in duty if the classification issue is resolved in favor of the Petitioner.
3. Applicability of the limitation period for filing a refund claim.
4. Jurisdiction of the Court to entertain the writ petition in the presence of alternate appellate remedies.

Issue-wise Detailed Analysis:

1. Classification of the Imported Consignment:
The primary issue pertains to whether the Belotti B-75 Container Handling Crane imported by the Petitioner falls under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975. The Petitioner argued that the consignment should be classified under Heading 84.22, which pertains to "Cranes, transporter cranes, etc." The Customs Authorities had classified it under Heading 87.07, which deals with "Vehicles." The Petitioner contended that the equipment, although mounted on a chassis with wheels, was designed for handling containers and not for transporting goods, and thus should fall under Heading 84.22.

2. Entitlement to Refund:
The Petitioner sought a refund of the excess duty paid under Heading 87.07 if the classification was found to be incorrect. The Petitioner had paid Rs. 23,62,792.83 for the equipment and Rs. 1,00,511.26 for its spares under the disputed classification. The Petitioner argued that the excess tax collected was without the authority of law and should be refunded under Section 72 of the Contract Act, which deals with payments made under a mistake.

3. Applicability of Limitation Period:
The Petitioner argued that the claim for a refund was within the limitation period as the mistake was discovered upon receiving the expert opinion from the Director, Central Board of Excise and Customs on 26th September 1983. The Petition was filed within three years of this discovery, thus falling within the limitation period prescribed under Article 113 of the Limitation Act.

4. Jurisdiction of the Court:
The Respondents contended that the Petitioner should have availed the appellate remedies provided under the Customs Act and that the writ petition was not maintainable. However, the Petitioner argued that the appellate remedies were inadequate as the claim had become time-barred, and the authorities had no jurisdiction to condone the delay. The Court held that the limitation period for filing an appeal did not bar the Petitioner from seeking relief through a writ petition, especially when the duty was paid under a mistake and collected without the authority of law.

Judgment:
The Court concluded that the consignment should be classified under Heading 84.22 as it was primarily designed for handling containers and not for transporting goods. The Court noted that Heading 84.22 specifically includes cranes and transporter cranes, while Heading 87.07 deals with mechanically propelled vehicles used for short-distance transport or handling of goods, which did not aptly describe the consignment in question.

The Court also held that the Petitioner was entitled to a refund of the excess duty paid, as the duty was collected without the authority of law. The limitation period did not apply in this case as the claim was filed within three years from the discovery of the mistake. The Court directed the Respondents to refund the difference in duty within eight weeks.

The Court stayed the order for six weeks on the application of the Respondents' counsel.

Conclusion:
The Petitioner succeeded in proving that the imported consignment should be classified under Heading 84.22, and was entitled to a refund of the excess duty paid. The Court's jurisdiction was upheld despite the availability of appellate remedies, given the circumstances of the case.